>> from bloomberg world headquarters in new york, this is " bottom line." president says russian troops across the border. cbs enters the red zone and looks to score with thursday that put all. and how a backyard production grew into an empire and youtube. to our viewers in the u.s. and those of you around the world, welcome. we have full coverage of the

stocks and stories making headlines today. 'helby holliday looks at cbs big play into football. we go to peter cook and the growing crisis in ukraine. the un security council in new york holding an emergency meeting to discuss the latest developments in ukraine. accusing president russia of sending troops and .eavy weapons over the border the russians deny the claim but it officials say satellite pictures provide proof of the russian incursion. russian forces moved across the border in what he called a sharp escalation. an emergency meeting was held of his national security council. ukraine accuses russia of opening up a third front near the key city of maripol.

the ukrainians also claim that they destroyed some russian military equipment. nato officials releasing satellite pictures that show russian equipment on the ukraine side of the border including self-propelled artillery. president appealing for international help. russiann confirm military boots are on ukrainian ground. ukrainian forces are capable to tackle and cope with the russian -led guerrillas, but this is quite difficult for us to fight with russia and its army. the united states, other international powers are responding to what is happening in the ukraine.

the u.s. still stopping short of calling what is happening in ukraine a russian invasion, still incurring -- referring to it as an incursion. there is great concern over what is happening here, this escalation, a call from the ukrainian prime minister for the u.s. and eu to freeze russian assets. the u.s. is considering all options including ratcheting up sanctions further. that un security council meeting beginning this hour. >> thank you. turning to iraq where the situation is very volatile, kurdish fighters with support from u.s. warplanes, have continued to push back islamic state forces over the past 24 hours. willem recently returned from iraq. the latest news about the fighting in that kurdish region in northern iraq, what are we hearing?

>> where i was last week have seen kurdish forces fighting near syria. couple oftaken a towns and oil fields in the region. some of these companies say they will now send back personal to the region now that they feel that the situation is stabilized. >> you talk about the islamic state group they're retreating in that part of iraq. how are they doing in syria? >> we see them retreating in northwest iraq. in northeast syria they have taken over the last major regime stronghold. there is an air base there which they have taken over, slaughtered dozens of the syrian army officers and soldiers. that was really the last stronghold they're belonging to assad. >> the islamic state militants are operating on so many fronts.

do we know about their ability to recruit others? >> from our perspective, they operate in an information vacuum, but really, we see from the death of mr. foley -- have numbers in terms of how they pay these fighters. if you are a foreign jihadist, you get $800 a month. local, $400. extra payments for a wife, children. trying to encourage them to come with their families. some sobering statistics and numbers, thank you. coming up, the second-quarter growth rate is revised up word. we will look at what drove growth higher than what is expectations for the full year. ♪

>> welcome back. the u.s. economy grew more in the second quarter than first estimated. the commerce department reports of gross domestic product rose at a 4.2% annualized rate, up from an initial estimate of 4%. michelle girard is the chief economist at rbs securities. she is with me from stamford, connecticut. good to see you again. you do not believe the gdp number radically alters the growth profile for the second

quarter. why not? change ins not much terms of growth with the exception of maybe investment was better. overall, the takeaway was the same as it had been before. aerybody is excited to see four handle on second-quarter growth. a lot of people have forgotten that it follows a contraction of over 2% in the first quarter and i don't think you can dismiss that. quarterske the two together, the economy grew only 1% in the first half, and that is disappointing. admittedly, the question is where we go from here. startings a great point, but i'm not sure we will be able to sustain that pace as you look ahead to the third and fourth quarters. >> you just alluded to this business investment, a big driver in the second quarter. how would you describe the business community's growth? >> i don't necessarily think

it's as strong as we would like to see it. certainly, the recovery in the second quarter following a week second quarter where we saw contraction, is good news. there are a lot of high hopes in the year that this was going to be the your businesses finally started to invest. they are doing that but not in a dramatically different pace than we have seen over the last couple of years. i still think there is a degree of caution. companies are spending but nobody is going gangbusters. nobody sees the need to go out and invest in a much more rapid rate. i don't think they expect the economy to suddenly roar, and that is why they would need to step up the pace dramatically. look atso got a corporate profits. for tax earnings rose 8% last quarter, the most since third quarter of 2010. but they were down .3% from the same time last year.

what is the corporate profit outlook for the remainder of the year and into 2015? >> i continue to think that is an area like the broader economy. it will be good but not great. companies have positioned themselves to be able to make money with an economy that is only growing 2.5 percent to 3%. i do not think profits are at risk, but at the same time, i don't see the engine for profit growth to really accelerate from here. i think it will be like the economy, steady as she goes, ok but not great story. with michelleng girard from rbs securities. addedntial construction .2% to the gdp number. contract to purchase previously owned homes rose more than forecast in july. is the strengthening in the u.s. housing market sustainable given stagnant wages and tight credit? >> the recovery is sustainable.

we have had disappointing housing numbers even through the spring. felt like itebound was soft. we are finally seeing some better home sale numbers. i think the improved job situation, decline in the unemployment rate, is helping the housing sec air. i think the housing story is one where we will see the pace that we saw in the second quarter continue, but that is a better pace than we had seen over the last six months. housing has struggled since last summer when we saw the backup in mortgage rates. it feels like maybe it is getting its feet back under it, but we will not see the kind of double digit growth, particularly in home prices, that we saw in 2012-13. >> we have been looking at these market numbers at the bottom of the screen and markets are trending lower at this hour. were you expecting the market to be more excited about the gdp number, or can we chalk this up

to being a late day in august? in august.late day this is a revision to the second-quarter gdp numbers. and the revisions were not that large to begin with. is focus on there geopolitical issues with russia. that is dominating the conversation more. it.s face next week's numbers, we get the first numbers out for the month of august, including the jobs report. that is what people will be looking for. >> market volume down 40% today. 30 seconds left, what is the fed to make of all of this? they are encouraged by the recovery in the second quarter and hopeful that that path of acceleration will continue. they are optimistic about the second half but they have been disappointed before. i think it is cautiously optimistic and a wait and see fed.

i think we heard that from janet yellen. they are watching the numbers like the rest of us, i think. youichelle girard, thank for joining us. always a pleasure to get your perspective. still ahead, are you ready for some football? cbs is betting big that you will be more than ready for thursday night football. we will hear from the cbssports chairman sean mcmanus. ♪

>> breaking news considering the city of detroit. it is getting 200 $75 million in chapter nine exit financing from

barclays according to the emergency manager for the city of detroit. we will stick to the senior director at standard & poor's tomorrow. we will take you to follow the story and bring you more details today as soon as we get them. football season is here and that means billions spent by networks 22 air nfl games. the league takes in $6 billion each year in tv revenue, but what is in it for the broadcasters? we crunch the numbers. which networks get the best deal? if you look at fox and cbs, they have 27 games each. if you take the average rating per game and you look at the number of games they have and then how much they pay, about a billion dollars each, they are paying less than two dollars per viewer.

fox, nbc, cbs, had similar deals. >> how do you calculate this? >> you look at the total cost. they are all spending about a billion dollars each, and then you look at their average ratings. fox and cbs, 27. nbc had 19. if you look at the total number of games, average viewing, you have total viewers. over a billion viewers on fox and cbs. that is more than the u.s. population. obviously, some people are watching more than one game. >> why is espn so much higher? for monday night football. that is just a different type of deal. time,a weeknight, prime the highest rated show on monday. they are also a cable company, so they have a dual revenue stream. they get money from you and me from the cable box, money that fox and cbs does not get, but there were also some

negotiations that have been written about. they would make the argument that we have more than monday night football, we have content to fill multiple sports channels all year long. the other guys just have a game in a studio show. so that goes into the total price. if you look at just the games, it is extremely expensive, so they have to fill it up with other content. >> do you think abc is wishing they had not given up monday night football? espn -- now part of the does sunday night football, which is the inverse of what it used to be. espn on sunday, abc on monday. the network packet is now on sunday, so they tend to be better. they have that lex schedule. they can steal a game between fox and cbs. nbc has a lot of power which is why their rate is a little bit fox, becausebs and

they are getting some functionality that the others do not have. you surprised that the nbc sunday night football is so popular? >> they are all popular. all of the numbers are above 20 million on the average audience percentage. the afternoon games, that 4:00 p.m. start, tends to be the highest rated game. there is no competition during the day. everybody watches that. >> thank you. you remember when football was just on sunday afternoons? speaking of which, no more. now even thursdays. cbs is betting big that thursday night games on its network will bring in the ratings. shelby holliday, who sat down with cbssports chairman sean mcmanus, is with me. all-out to make

sure thursday night football is a success. they are airing promos across cbs channels, they are announcing 18 members of their team, and they are shuffling prime time programming to accommodate the games. why? ratings are a big deal, but also because this is a one-year contract. cbs recognizes the value of it and wants to win the contract again at the end of the year and wants to be the home of thursday night football in the future. when i sat down with sean mcmanus, he explained the importance of this thursday night contract. >> it is fair to say we have not promoted a franchise like this in a long time. it has been the biggest promotional push we have had and cbs in years. we got the rights to thursday night football in early february. we started our campaign in early march and it's been on the air since then. by the time the opening game

kicks off, everyone in america will no there is thursday night football on cbs. >> this is why the deal is creating so much buzz. they are airing only the first half of the season. cbs will half, which be promoting and producing, will be aired on the nfl network. proppingre essentially up the nfl network for part of the season. >> why is cbs bothering? because live sports, especially football, are incredibly valuable to tv networks and advertisers. at first glance, it seems like cbs does not need thursday night football. they have one of the highest-rated shows on thursday night. that attracted about 20 million viewers. , viewers of "the watch moreeory"

recorded shows. most football fans will watch live, and that is why cbs sees value to bringing football to thursday night. cbs is also looking at the brand potential for thursday night football, like monday night football. they are hoping that putting their eggs in the basket will pay off and will get a long-term contract. with a looklliday at thursday night football on cbs, thank you. let's reiterate the breaking news we told you about a few moments ago. receive of detroit will 270 $5 billion in chapter nine exit financing from barclays, according to the city's emergency manager. financing will be used to pay out $120 million the city borrow to help fund the bankruptcy, pay creditors, and revitalize the city. $200 million of debt will be tax-exempt.

the city previously won court approval to borrow that money. i will be speaking to someone from standard & poor's tomorrow for her take on these developments. 26 pass the hour. bloomberg is on the markets. good afternoon. let's get you caught up on where stocks are trading. we have been pushing up against that 2000 level throughout the morning and afternoon and have not been able to break it. 1997 right now. nasdaq offdown, the .2%. i want to highlight a couple of individual stocks. at an all-time high after reporting a 39% jump in second quarter sales that beat analyst estimates. andet owns the kay jewelers d's and recently acquired

another. guess is warning that they are not getting the attraction that they had thought would their the clothing. they cited softness in north american stores. i stepped in and there were no acid washed jeans to be seen. ♪

>> welcome back to the second half-hour of "bottom line." the united nations security council is meeting right now in an emergency session on the growing crisis in ukraine with some members expressing outrage. you are looking at a live shot of the council meeting. the undersecretary general of clinical affairs told council members that the latest a dangerous marked excavation in the conflict. a top official says at least

1000 russian troops have poured into ukraine with sophisticated equipment and have been in ,ontact with ukrainian soldiers resulting in casualties. the russian ambassador to the u.n. told reporters "you are at as he walked into a council meeting and gave no further comment. we will have more developments as soon as we get them. more evidence today that the euro zone economy may need more stimulus. the european commission economic confidence index fell more than forecast in july, hitting its lowest level this year. john herman is the director of interest rate strategy at this beauty -- mitsubishi securities. welcome back. this latest news that we are hearing, confidence index, it has hit the lowest level this year. what is going on? eurozone,nately, the

to me, seems to be spiraling in a similar way to the way japan did back in the 1990's. when i look at the problem, i see many features of the economy and the steps that policymakers have done that are similar to the japanese situation. that youcently wrote believe there are japanese-style risks in the eurozone. what are they, and could they be game changers for the ecb? >> yes, i see a lot of similarities, and let's try to run through a few. in the early part of the 1990's, they had a large credit bubble which burst. so there was a negative wealth effect on the households, with the plunge in the real estate values, and then we saw some thing similar in europe. in japan, they were slow to react to it.

we saw that similarly in europe. they allow the credit spreads to blow way out before mario draghi stepped up in 2012, but they have not done a lot since. they have been slow to act. in japan, they did not do enough monetary stimulus and they proposed a lot with -- with fiscalraghi -- but policy, they did little in japan in the 1990's. in europe, they have a problem of being able to coordinate this policy. the global flows look like, and why aren't asian investors showing so much interest in u.s. strategy? >> if we look at the yields through europe since june, they have plunged about 50 basis points or more. , you canelds

practically overladen with the japanese yield curve. the demographics in germany look like they will be very reminiscent of the japanese demographic within 15 years. the economy appears to be an overlay. and it is not just germany. italy, portugal, greece, holland. they all seem to be facing this kind of problem. >> so is mario draghi right, does the eurozone need more stimulus? >> of all the policymakers makers in the world, he seems to speak the most frankly about the situation. i think he grasps the severity of it. >> he touched on this in jackson hole, it seemed like he was sending a warning shot then. >> i'm not sure he will be able to do anything next week as many think he will enact something new next week. i'm not sure that he will get in next week, but more than others, he seems to grasp the structural problems in these countries,

citing the high tax rate regions, the inefficiencies in the labor market, and also the rigidity in enabling small businesses to form. and he speaks very candidly about that in public, and that has enabled policymakers to discuss it more openly. >> you mentioned the ecb policymakers. they will be meeting next week. this discussion, will it be dominated highways to hear the eurozone away from deflation, or might they see this recent data as an aberration, as opposed to structural? >> i think mario draghi sees this as an unfolding sequence of events that are leading in one way, and -- >> it looks like happening in slow motion. come out of this thing and we have started to grow, but they are diverging and struggling to stay above water.

suppressedas done is the yields, and as you said, has encouraged overseas money to seek safety in u.s. treasuries but also to grab the yield premium that exists here in the u.s. >> we are hearing, at the top of this blog, about what is happening at the un security council. to what extent is the violence and the political unrest there driving what we are seeing in the eurozone and economic decisions of european policymakers? under cannot that -- estimate the sensitivity of those areas to political development. ist we see is confidence weakening. real investment slowing and moderating. .t is a problem i do not see any easy solution to that situation.

it is a matter that one get more attention. as you alluded to, it has conspired to reinforce the trend lower in yields in europe, and that is causing foreign money to seek the u.s.. >> thank you for joining me. coming up, argentina's workers take to the streets. the countries that troubles cripple the economy. that story in just a moment. ♪

>> it is time for today's latin american report. off the job today in argentina. it is the second national strike in less than five months.

labor unions are calling for higher wages and are protesting dismissals as the country's debt, and undermine growth. what kind of pressure is the president facing, not only from foreign predators, but at home? >> if there are pressures in the economy, she will need to face up to them. there is inflation that is very high in this country, estimated at about 40% year over year. imagine what that does to wages if they cannot keep up with that. in this economy that is not very expensive is the dollar because it is controlled by the central banks. there is pressure on the dollar, demand for the dollar because people want to save in that. that undermines the currency and puts tremendous pressure on everything that is trying to keep it up. >> does this strike him as a surprise? >> not if you look at the

pattern. the situation has been getting worse and worse. these national strikes did not end well a few months ago when there was another one. several were killed. there is looting that comes in with them. this is a pattern of a theinuing trend, that economy is not holding up the way that politicians would like, especially ahead of an election. why hasn't the argentine government released inflation numbers since february? >> they revised their estimates at the request of the imf. said that they were underestimating, if you will, by a lot. they said it was at about 10% when everyone was estimating 30%. so a big cap.

to change theded methodology of their inflation statistics in march, they stopped releasing annual year-over-year data. so it is still up to us to look at how they are measuring year-over-year. as you know, under estimate could mean you got your math wrong, but to others, it could mean you are not being truthful. >> there are bonds the government has to pay linked to inflation. if you are underestimating inflation, you have to pay less on those bonds. you are cheating bondholders of the amount of money owed between the gap of what you say inflation is and the real inflation. >> reserves are shrinking. how quickly? >> they have started to taper weren terms of -- they plunging very quickly earlier, and now they have slowed down, but they are still falling. the problem is, the country depends on money coming in from

commodity sales, exports. peso will think the devalue in the future, they have no incentive to sell at these prices because they could get more in the future. so they hold back their brains and then the money you are counting on coming in does not come in. it shows itself in the economy. katia, thank you. finding fame used to mean the ed sullivan show or american idol. now it is you to. we will have one success story when we continue in just a moment. ♪

>> welcome back. youtubeltime started on and now has more than 700 million viewers.

last year they were snapped up and now they have big-name sponsorship deals and a cable empire."ed "epic meal what happens when a youtube sensation goes hollywood. thursday at the stadium east of los angeles. shoot is getting ready to the latest episode of the tv empire."ic meal before this, there was a youtube show which made him an internet sensation. >> i would call it a celebration of food. epic mealtime was a show that i made four years ago. the first video that 120,000 views in the first week. we did another one the next week and it got 600,000 views. then i quit my job and committed

to making the videos weekly. now we have 700 million views. that type of viewership, media companies were looking to cash in on the success. we started to get phone calls from hollywood, discovery, maker studios. they all wanted to present us. we had worked with collective already, so we had faith in them. >> collected digital promotes youtube channels. epic mealtime was already established and we were aggressive about getting business. this was the kind of property that is multi platform. really strong humor. wheresees a new world audiences are generated online. >> we are starting to realize that maybe they are not as mainstream as they think and the mainstream could be in the halls of youtube. collective can take a show like

"epic meal time" from the backyard to the mainstream media. >> they have a number of brand that they have long-term agreements with. they have a bacon sponsor. >> of course, with all that money, there is the concern of losing creative license. we lost not that creative freedom, but we are more censored. on television, there is a lot more censorship involved. >> but it also means bigger budgets and more bacon. >> the first episode cost $70. now they cost $20,000. one time we made cars that were this big. we made aeal empire" full car that i can drive, and i ate it. >> i am so hungry right now but i cannot eat any of that. make sure to check out the latest edition of bloomberg businessweek. you can read it on the go with our new business week app.

at the toprt" starts of the hour. a lot going on right now geopolitically. >> a lot of developments coming out of the ukraine. saying that there are 1000 russian troops on the ground. lots of questions as to what vladimir putin's motives are. is he trying to establish a land corridor to crimea? i will speak to a former ambassador about all of this. also, the president of the eurasia group, ian bremmer. and it is not just what is happening there, we also have issues with russia now hacking into u.s. banks. jpmorgan is one that is known. there are four others that have apparently been hacked into by russian hackers. we are not certain, but some are saying -- including some that used to work in the white house

-- who believe this is very much a state-sponsored effort i russia in an attempt to get back at us for the sanctions we imposed. so a lot of questions. wide shut ofd eye the un security council. samantha power spoke moments ago and said russia has lied about actions in the ukraine and says that the mask is coming off. even angela merkel and francois hollande say that more sanctions could be in the offing. >> something clearly needs to be done. ukrainian prime minister coming out telling reporters that sanctions from the west are not working. in other words, these sanctions that we put in place. apparently they have had little effect and putin is now on the ground with the troops. so what can be done, what should be done, and what is the effect on the overall international markets? we see a flee to safe havens when you look at bond yields, for example. will that continue?

>> continued at the top of the hour. stay with us. market movers on the other side of the break. ♪

>> get the latest headlines of the top of the hour on bloomberg radio, your tablet, and on bloomberg.com. that does it for this edition of "bottom line." on the markets is next. it is 56 past the hour which

means bloomberg is on the markets. let's get you caught up on where stocks are trading. people swear that 2001 was not a technical level but it has seemed to offer some resistance. right now we are still under it, 1997. the dow jones down .2%. .2%.asdaq also down not a lot of action but we are not looking at green arrows. we have a behind-the-scenes look at how stocks are traded. the story of old cool wall street traders versus high-speed machines and it looks like machines could be winning the battle. imc chicago, and automated trading firm, completed its takeover of goldman sachs n.y.c. trading unit hitting it the ,ight to sell dozens of stocks making a market in one of just many high-frequency firms taking trades at the nyse.

there are still some humans there. john is with me from bloomberg news. there is still a floor with active traders. i know there are a lot of guys from barclays, genco, knight capital. longer bechs will no operating as a designated marketmaker. >> imc finished those operations this week. reporting began in april. it was said that goldman bought the operations about 10 years ago for $5 billion. they sold those operations for about $30 billion. -- million. >> so it took them 12 years to lose what j.p. morgan lost in a matter of days. after the flash crash, people understood that if you leave all of this to machines, it could be disastrous. havet looks like we

forgotten the lessons of the past once again, very quickly. >> the sec is looking at that. they do not seem to be coming out to say that they distrust high-frequency trading. they seem to understand that these are the firms that are the go-betweens. it appears there is no going back, and that is what the story was about how the looking at that. hf firms are the way right now. >> it is difficult to put the genie back in the bottle, as they say. as soon as you start offering ,rades at a fraction of a penny but there are disadvantages to high-frequency trading. some people distrust high-frequency trading. there was recently a book out about it. >> you may have heard about it. you cannot go to any conference

where the lewis book is not brought up. people on the other side would say, look how cheap it has gone to transact. imc once this business. we talk to other designated marketmaker is and they said, if you are very technologically savvy, you can still make money, but if you are a big perm with a lot of overhead, maybe it is not profitable anymore. still on the floor. thank you for the story. you can check it out on bloomberg.com. "street smart" is next. ♪

>> welcome to the most important hour of the session. stocks in the red and setting the s&p below 2000 as the conflict in the ukraine overshadows a gdp reading. i am trish regan. ♪ >> coming up today, the conflict between ukraine and russia entering a dangerous new